2008 Concludes - What To Expect From Stocks In 2009?

Finally we can bid farewell to this crazy market year we call 2008. It seems as if investors felt a little optimistic seeing the year end not completely in shambles as we saw the Dow end up another percent today. To be honest, I'm glad the year is over. It's almost as if people have been waiting until 2009 to see everything change. I am sure we, as a country, will have another pretty strong reality check as we continue to see things not get better around here anytime soon. But for now, I cheer with the investors to hopefully be able to find greener pastures in 2009, as I do prefer to make money on the way up, than on the way down.


I received a lot of emails asking about my experience with Lending Club. I have not joined yet, but will probably next week. I will be sure to keep you all updated to see if I indeed make the 10%+ returns I am hoping for. I'm sure there are many people looking at their accounts for end of year statements, whether it be your IRA or trading account and are seeing pretty massive losses, as all industries received the biggest slam since the 1930's. Below is a chart showing the overall 2008 ending performances for the popular indexes, with China and Dow Financials coming in as the worst for the year.

Gold remained up, which I still remain bullish, as my GDX shares just about touched $34 today. It seems like just yesterday I was buying those shares at $18. I still think gold has a lot of catching up to do as do other commodities.

In light of our new President taking office here shortly, I will be looking into some good alternative energy investments, as I feel those should receive a pretty strong push as Obama's energy package is very favorable to alternative energy. With lowering oil prices, solar has been slammed with people thinking that with oil so low, there is no need for alternative fuels. Well, with the kind of incentives and tax credits Obama is sure to activate during is reign, they look awfully good to me. STP has been on my radar for a while as they are a strong solar competitor. I also have invested in some research and development stocks (CABN and OOIL), which being R&D, their current stock prices are low, but their product and technology is right up Obama's alley. I think both of them can easily produce 100%+ profits in the near future. Sure, they are definitely more risky, but I'll take my chances with this president.

These thoughts are a bit pre-mature, but I try to stay a little ahead of the game. I still think we have some serious bleeding to go before we see any light in this market. Days like today can make people think we're back on track, but by looking at the facts, I cannot even come close to thinking that. Plus, we had some confidence pushed in with The Fed announcing last night that they would begin to buy mortgage securities in January. This is what caused a strong rally for real estate today and a horrible day for SRS and SKF. If people think this announcement means our real estate days of woes are done, think again.

So we close one door, only to open a new one. It will be interesting to see what 2009 brings. It is such a critical year for our economy, especially with the new president. I think some will make a lot of money this year, as many will lose more money (in my opinion). The current VIX levels have made people a bit more comfortable with market conditions, but remember, a market crash usually strikes when people least expect it. Thank you for those that comment and nice emails. I would like to have good discussions on this site, so please feel free to comment and give your insights. Good night all and Happy New Year.

9 comments:

  1. denis Says:

    i have a question. you have said in the past your are in the commercial real estate business, what do you do? if you dont mind me asking...SRS is my #1 for 2009

  2. HSingh Says:

    http://finance.google.com/finance?client=ig&q=SRS

    check the link and compare it with IYR for 1 month and 1 year. SRS should be double -ve of IYR. IT is not. It's a scam. why are you telling people still?

  3. Finance Fanatic Says:

    Hsingh,
    It is true that SRS does not directly inversley match the tracked index due to expense costs and leverage, but it does indeed move inversely with the momentum of the fund. To call it a scam is a bit ridiculous in my opinion, especially considering the amount of money I have made with SRS in 2 previous rounds. Make trades that you are comfortable with, as for me, I have absolutely no problems wih the Proshares ETFS (and neither did most everyone else when they were all at 200+ prices).

  4. Anonymous Says:

    Hi FF,

    Speaking of expense costs and leverage for SRS, isn't it a better idea to short URE instead?

    Thanks

  5. Anonymous Says:

    Hey FF,

    Based on your S&P 500 chart analysis, we have now hit 920 magic number. Does this mean a big trend change?

    Thanks

  6. Finance Fanatic Says:

    Anon, That original 920 number was technical momentum point for that point of the market at that time. Those momentum points are like snap shots and change over time, so no at this point that number is not significant.

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